If you are thinking about renting your current residence, one big consideration is whether there are any restrictions in your mortgage concerning the switch from primary residence to a rental property. You situation will depend on your lender and the type of mortgage you have. The wrong path is to rent out your home before doing your homework on any mortgage restrictions.
Check Your Loan Documents
Dig out your mortgage paperwork and read through the entire contract to find any residency or rental restrictions included in the documents. Any requirements that must be completed before your home can be rented should be listed in the loan contract. If you have questions concerning the meaning of what you read, consult with a real estate or lending professional. Start with the real estate agent who helped you buy the house or the lending officer for the mortgage.
Call Your Lender
Make a phone call to the customer service department of your mortgage company. Your story will be that you may possibly move and keep your home as a rental property and you would like to know what information the mortgage company needs if you do rent the home. Obtain the names and contact numbers of any lender personnel who should be notified if you rent your home. Make a list of the information the lender would need in the case of a rental.
Cover Additional Requirements
Make sure you take care of any additional requirements the mortgage lender may have if your home becomes a rental property. You may need to change the insurance coverage or provide additional contact information -- such as a property manager -- to the lender. The lender may require that tenants have renters insurance. For your own financial security, make sure you have the financial resources to cover the mortgage if the home is not rented for any period of time. Make sure you have everything with your renter in writing to protect yourself if your lender has questions.
Don't Risk Getting Caught
Even if you do not find any requirements to notify your mortgage company that you will be renting the house, you should notify the lender of the change to a rental. Provide the lender with your new mailing address and contact number so you can be promptly notified of any important information about your home loan. With the home in rental status, it may be even more important to keep a line of communication open with your mortgage lender.
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